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Professional Articles

The successful 2015 InterChainZ project demonstrated it was indeed possible to build distributed ledgers that can store, exchange, and keep records of any kind. We demonstrated an interface for tasks including selection and storage of documents, document encryption, sharing keys, viewing the InterChainZ transactions, and viewing the InterChainZ contents subject to encrypted limits. The interface was deliberately simple, and served the purpose of demonstrating how distributed ledgers work in practice.

Objectives & Scope

The objective of IntereXchainZ is to build a mutual distributed ledger marketplace. This marketplace uses distributed ledgers functionality to build a controlled environment which will:

  • manage identity through authentication; 
  • execute transactions across space;
  • handle transactions over time; 
  • provide a platform for mutual collaboration. 

The output of IntereXchainZ will provide a generic marketplace for insurance, trading, payments, shipping, etc. IntereXchainZ will effectively be the next phase of research building on the successful InterChainZ which demonstrated how distributed ledger technology could be used in financial services businesses, including insurance, credit referencing, and corporate & personal identity validation.

IntereXchainZ will build a new model exchange with the ability to establish trading communities, match buy and sell orders, authenticate member identities, and provide management and control tools. InterChainZ showed that simple mutual distributed ledgers were constrained in a number of ways, e.g. direct document storage was possible but cumbersome. IntereXchainZ thus adds:

  • facilities for automated creation of new mutual distributed ledgers - a parameter driven system providing options for permission management, proof of stake and identity settings, supervisor-master and other node settings, and peer-to-peer structure settings; 
  • management and control features - user authentication and control, billing on a per user or per transaction basis management information, monitoring and testing facilities; 
  • integrity proofing - dynamic anomaly and pattern response additions, monitoring and testing facilities;
  • market functions - order matching, margining, account functions, clearing, settlement, as well as possible uses of a token currency within exchange;
  • usability and ergonomics to enhance the end-user experience - exploring the end-user experience by connecting IntereXChainZ to off-the-shelf wallets for cryptographic key management; 
  • exchange functions - processes to make the basic interacting ledgers into a demonstrator of a full exchange, with numerous ‘use cases’ therein, e.g. sharing identity functions with transactional functions and storing relevant documents securely and permanently; uses of a token currency within the exchange; 
  • data taxonomies, encryption levels and tracking - how feasible is it to have differently labelled categories and 'data boxes' (e.g., health, car insurance, home insurance, driving record, etc on a person's MDL) that can only be opened as a group, to encrypt levels with levels (first order health data perhaps before detailed data), to provide access records (who opened, when) and might homomorphic encryption have a role;
  • Content Hash-Addressable Storage Market (C#ASM) - extending the 'identity', 'transaction', and 'content' chain thinking that emerged from InterChainZ into an indexable archiving system both as a ledger itself, but also supporting other ledgers;
  • further investigation of storage permutations and requirements, including implications of storage "off ledger", synchronisation of of entries at different times and from different places;
  • addressing issues around trust and management, e.g., managing the process when records expire or individuals request to leave the system; how can encryption be made usable and secure for large numbers of users, options for publishing the ledger hashes to increase trust levels;
  • stress testing the capacity of the ledgers, e.g., for addition and removal of nodes and/or network members;
  • documentation of regulatory standards for mutual distributed ledgers and legal entity identifiers.

The outputs will primarily be delivered using an online demonstrator showing the exchange application in action.  Z/Yen has experience in developing exchanges and will provide our existing exchange software to act as a basis for developing the IntereXchainZ exchange.  Consortium members will be able to use all the software with their own clients and communities as they explore how they can use distributed ledgers for real business purposes. As with the InterChainZ project, this trial software will be brought into the consortium as shared intellectual property.

The outputs will also include written material to be published on the IntereXchainZ web area, and the regulatory standards agreed with the Channel Islands and the Isle of Man.

The project should be of interest to any major financial services firm, e.g. exchanges, registries, central counter parties (CCPs), insurers, custodians, information providers, central securities depositories (CSDs), banks. 

The results should provoke discussions with regulators and industry leaders on the potential rewards and risks of using distributed ledgers for marketplaces. Z/Yen invites interested parties to join this research consortium to participate in the development and testing. Members will be able to demonstrate IntereXchainZ to internal and external partners as a tool for developing new business opportunities. This research began in Quarter 4 of 2015, with a view to ending in Quarter 2 of 2016 with full documentation and website materials.

More information

To join IntereXchainZ, please contact This email address is being protected from spambots. You need JavaScript enabled to view it.

The InterChainZ research consortium have worked closely together to create these exciting demonstrators.  Members of the consortium include:

  • DueDil: We are the business information provider for the UK and Ireland. It’s an easy way to access millions of official company and company director documents online. We have collected and connected 20 years of financial history, contact information, corporate structures, director timelines and litigations.
  • PwC: Our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at PwC.com.
  • SunCorp: Suncorp Group includes leading general insurance, banking, life insurance and superannuation brands in Australia and New Zealand. The Group has 15,000 employees and relationships with nine million customers. We are a Top 20 ASX-listed company with $96 billion in assets. Suncorp has five core businesses: Personal Insurance; Commercial Insurance; Vero New Zealand; Suncorp Bank and Suncorp Life. We are the largest general insurer of Australians by Gross Written Premium (GWP) and the largest provider of personal injury and Compulsory Third Party (CTP) insurance. Our portfolio of personal and commercial insurance brands sell motor, home and contents, travel, boat, motorbike, caravan, business, workers’ compensation and CTP insurances.  These products have the potential to reach 92% of Australians. We deliver products and services to personal customers, small and medium sized businesses, as well as corporate clients. They are sold directly or through intermediaries such as brokers. In Australia, we are committed to helping educate the community about road safety, storm preparedness and natural disaster mitigation.
Global consultancy – Identity Validator

This use case demonstrates the distributed ledger functionality to be used by an identity validation service.  The service will review and validate identity and financial information about high net worth individuals, adding it to the distributed ledger to confirm they have verified it.  A third party, e.g. a bank or financial service provider, can be given secure access to the chain to confirm that the individual’s information has been verified.   This validation service will be useful to individuals who need to comply with Anti Money Laundering or Know Your Customer requirements. 

Corporate diligence specialist – Corporate Credit

This use case demonstrates the functionality and storage that uses allows companies to use distributed ledgers to validate their identity and report on their finances.  A trusted third party reviews the company information and adds it to the distributed ledger, thereby confirming they have verified the information.  Potential creditors or business partners are provided with a public key, allowing them to either confirm that the information has been verified, or view the company information itself. 

Financial conglomerate incl. insurance activities – Insurance

This use case demonstrates how an individual or business seeking an insurance policy can store their insurance history and relevant data on a distributed ledger and share the key with an insurance company when applying for a new policy, or an endorsement to a new policy.  New policy details can be added to the chain allowing the policyholder to easily request new policies or updates.

This research aimed to answer the core question – “what elements of a trusted third party are displaced by blockchain technology?” by providing a basic demonstrator of distributed ledgers, including blockchains, and comparing how they might work within selected financial services use cases. The research revolves around an online demonstrator of InterChainZ, Z/Yen’s prototype distributed ledger system developed in-house.

Started in June 2015, the research process was divided in six stages, using Z/Yen’s Z/EALOUS methodology.
Z/EALOUS Methodology
Z/EALOUS Image
Establish Endeavour
In this first stage of research, the consortium members led by Z/Yen Group agreed the scope, objectives and approach of the research. In particular, it was agreed that the research team would explore several architectures, including Z/Yen’s InterChainZ. The research team started approaching other organisations operating distributed ledger software. The consortium also agreed to contrast and compare selected distributed ledger software on performance, resilience and security by exploring how they worked in the set of four agreed ‘use cases’:
  • identity validation;
  • credit data information sharing;
  • placing a small business insurance policy;
  • placing a motor insurance policy.
Assess and Appraise
The team and consortium members agreed the use cases to be tested and what anonymised data could be supplied for the testing.  In parallel, the team sought to approach other organisations known to operate distributed ledger systems in order to invite them to participate by providing their distributed ledger systems for comparative testing.  In the event Bitcoin data was easily available for analytical comparison and Ethereum had just launched a new system (Frontier) for which data was readily available.  However three other parties who claimed to have 'open source' software proved, despite discussion, not to have software yet ready for comparative testing.   

Lookaheads & Likelihoods
The third stage of research centred on uploading data for each use case’s content MDL and consortium members were invited to explore their use case on InterChainZ. R&D focused on validation with three separate validation architectures developed including:
  • all nodes - Every node (aka server) can add to the MDL.
  • master node - only the Master can add to the MDL.
  • supervisor node - the Supervisor needs two other nodes to co-sign in order to add to the MDL.

An independent ICT expert subjected InterChainZ to a security review during the course of the research, conlcuding, "the system stacks up cryptographically, by which I mean you can use the system to create the kind of non-repudiatable proof you want."  However the more important the system the more attractive it becomes to attack.  


Options & Outcomes
In this fourth stage of the research, the team explored storage options and network architectures for InterchainZ.  Each use case was expanded to contain not only a Content MDL (with all the documents) but also a related Identification MDL, with the team exploring different levels of interactions between the two chains. The team also sought to test the scalability of InterChainZ by increasing the number of servers across which the prototype runs.

Understanding & Undertaking
The team collated preliminary findings stemming from previous stages, including issues and possible recommendations for future R&D efforts. A user guide was created and circulated to all consortium members. A sense-making session was organised with the research consortium members to discuss the findings and recommendations and how these should be presented.

Securing & Scoring
During this final stage, the team worked to finalise web-based materials including:
  • an overview of distributed ledgers;
  • a user guide for InterChainZ;
  • the overall findings from this phase of work, including related videos and graphs;
    proposed recommendations for future research.